TalkTalk launched FibreNation last year and said it would connect 60,000 more homes in northern England with fibre, underlining its ambition to build its own ultrafast network reaching three million customers after it abandoned an earlier plan to team up with M&G Prudential.

CityFibre has network projects in more than 50 cities, with the aim of connecting 5 million homes with fibre conections.

TalkTalk and CityFibre declined to comment. TalkTalk's shares were up more than 3% following the Sky News report.

Broadband companies in the UK are looking to take advantage of an ambitious plan pledged by Prime Minister Boris Johnson to "end the digital divide" through the rollout of full fibre broadband by 2025.

Companies possessing a full-fibre network are an attractive asset for firms looking to build a presence in the sector without spending on new infrastructure roll-out.

Last month, Macquarie unit MEIF 6 Fibre Ltd said it would buy KCOM Group Plc, valuing the British telecoms company at 627 million pounds ($769.77 million).